Time to Take a Look at Cnooc

China's offshore energy giant sparked a confrontation with Vietnam with an oil rig in the South China Sea. The investment case for Cnooc is much less controversial.

Shares in the listed arm of state-owned China National Offshore Oil Corp. are down 10% this year even as Sinopec and PetroChina have risen on hopes Beijing is letting them become more market-oriented. Cnooc has lagged behind output targets, stoking concerns about...